Asia Distillates-Margins slip as Indian exports increase

October 12, 2012|Reuters

SINGAPORE, Oct 12 (Reuters) - Asian gasoil margins slippedon Friday as more spot exports emerged from India with itsdomestic demand lower than previous months on a delayed monsoonand weaker economic outlook. The November gasoil crack fell 36 cents to $19.12 a barrelabove Dubai quotes, lowest since beginning of October, Reutersdata showed. India's Essar Oil has offered its first November loadingcargo which will make it the company's fifth diesel export intwo years. India's diesel exports for October were expected to increaseby 20 to 30 percent from previous months as domestic demandremains poor due to the delayed monsoon season and a weakeconomy. Reliance Industries, India's biggest diesel exporter, wasexpected to increase its monthly diesel exports from its usual1.4 to 1.5 million tonnes a month to nearly 1.7 million tonnesin October, according to estimates given by several traders. Essar Oil's cargo offer suggested that refiners expecteddomestic demand to remain weak at least until early November. "It's very difficult to predict the demand for next month,some are expecting sales to pick up during the festival season,but it's really hard to say," a second Indian-based source said. The festival and wedding season will start picking up in lateOctober and peak next month during Diwali and Dhanteras, whendiesel demand for transport usage usually rises on increasedtravelling. India's Mangalore Refinery and Petrochemicals Ltd (MRPL)sold its jet fuel cargo at a discount of 80 cents a barrel aboveSingapore quotes, about 20 cents firmer than a previous cargo,suggesting good demand from Europe for arbitrage cargoes. The company, however, sold its gasoil cargo at weakerprices. It sold an early November loading 0.25 percent sulphurgasoil cargo to BP at a premium of about $2.50 a barrel aboveSingapore quotes, about 25 cents lower than an earlier cargo. Thailand's PTT sold a gasoil and jet fuel combination cargoto Chevron for early November loading at premiums of $1.70 and$1 a barrel respectively, traders said. In Taiwan, Formosa Petrochemical Corp may reduce itsNovember diesel exports by up to two cargoes as it has shut asecondary unit following a leak. The No. 2 residue desulphuriser unit was shut on Thursdayand the unit will stay idle between 7 and 10 days. Vietnam's Saigon Petro bought 10,000 tonnes of 0.25 percentsulphur gasoil for late October at a premium of 40-50 cents abarrel above Singapore quotes on a free-on-board (FOB) Singaporebasis.